New business creation increased in 32 states and in nearly half of the metropolitan areas measured last year. Montana, Wyoming, North Dakota, Colorado, and Vermont ranked highest in the Index.

For cities, Austin led the way—topping this year’s Index with the highest rates of startup activity. Other “usual suspects” like San Jose, San Francisco, and Denver top the list.

By region, the West and Southwest have a high concentration of metropolitan areas that rank highly.

Startup activity is growing again in America, but it is still below historic norms. Moreover, the latest data from the U.S. Census bureau continue to show a long-term decline in startup rates.

All states and cities—even those at the top of this year’s Index—can grow.

How Policymakers Can Bolster Entrepreneurship

Though the Kauffman Index: Startup Activity is the leading indicator of entrepreneurship in the United States, it doesn’t tell policymakers how to improve the environment for new business creation and growth.

The Kauffman Foundation works to understand what public policies can make the U.S. economy more dynamic and entrepreneurial. Here are some of our answers:

Welcome Immigrants

According to the Kauffman Index, immigrants are nearly twice as likely as native-born Americans to start business.

In many states, however, strict enforcement of non-compete agreements blocks, or at least delays, entrepreneurship by erecting a barrier to mobility. To facilitate labor mobility and competition, states can shorten the duration of non-compete agreements, mandate employers disclose the requirement to sign a non-compete earlier, and narrow the scope.